THE European
Union yesterday notified the WTO Secretariat of a request for
consultations with Brazil over alleged discriminatory tax advantages given
by Brazil in the automotive sector; the electronics and related sectors;
with regard to goods produced in Manaus and other Free Trade Zones, and tax
advantages for exporters.
According to the European Union, these measures increase the effective level
of border protection in Brazil whilst providing preferences and support to
domestic producers and exporters, by, inter alia: imposing a higher tax burden
on imported goods than on domestic goods; conditioning tax advantages to the
use of domestic goods; and, providing export-contingent subsidies.
The request for consultations formally initiates a dispute in the WTO. Consultations
give the parties an opportunity to discuss the matter and to find a satisfactory
solution without proceeding further with litigation. After 60 days, if consultations
have failed to resolve the dispute, the complainant may request adjudication
by a panel.
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